CATERING group Compass served up a reassuring trading update yesterday that confirmed it was on course for at least six per cent growth in revenues.

The group - best known for its Upper Crust sandwich chain and supplying food to blue-chip companies - said its North American businesses were performing strongly and UK revenues had risen in line with hopes for the first four months of its financial year.

It picked up further contracts through its Medirest division providing services to the National Health Service that included catering, housekeeping and grounds maintenance.

These include the renewal of a contract with the West Hertfordshire Hospitals NHS Trust for another five years with an annual turnover of £8.6m.

Medirest was also awarded a five-year contract with Homerton University Hospital NHS Foundation Trust, in London, generating £4m a year in revenues.

At its annual meeting of shareholders in London yesterday, chairman Sir Francis Mackay said clients opting to hand responsibility for food service to Compass were driving business wins across all its divisions.

The group secured contracts in areas such as healthcare and education, but said a slowdown in growth in the defence, offshore and remote sectors had taken place as expected.

Turnover was growing strongly in North America, where the company won a ten-year contract worth £8.6m a year at a university in Indianapolis, while it was also performing well outside Europe.

However, Sir Francis said its businesses in Northern Europe were continuing to face challenging conditions, and France, Germany and the Netherlands in particular were suffering.

Compass employs 400,000 staff in more than 90 countries and owns the Caffe Ritazza and Harry Ramsden's fish and chip shop chains.

The company has been trying to rebuild relations with investors since it shocked the City with a profits warning in September.

That warning caused Compass to lose a quarter of its value.

Investec analyst Robert Morton said an important step in the process of restoring credibility would come in May, when Compass gives guidance on longer-term objectives alongside half-year results.